Pepsi may win Challenge, but loses most crucial test

Yes, the Pepsi-Cola Co.--which invested heavily in the Oscar broadcast with the second wave of its "Joy of Cola" campaign--has been getting beaten by Coca-Cola in the U.S. (and slaughtered by Coke internationally) generation after generation after Pepsi generation.

So now, sensing opportunity as Coca-Cola finds itself struggling with image and profitability problems, the Avis of soft-drink companies is reprising a famous gambit: the brazen, cheeky, confrontational Pepsi Challenge.

Once again, consumers will be asked to participate in blind taste tests between various Pepsi products and their Coke counterparts. History and extensive consumer research presage the results: the Pepsi brands will win across the board.

But prevailing in taste tests is by no means the Pepsi Challenge. The real challenge is prevailing in the marketplace, which involves succeeding in three ways in which the company has failed to succeed before:

1) Giving consumers a reason to choose Pepsi.

Apparently people like the "Joy of Cola" jingle. How could they not? It's irresistible. By the same token, Hallie Eisenberg--the cherubic little Pepsi girl--seems well accepted by the public. She may not have any particular appeal to the teen-age core audience, but she does broaden the message for the non-15-year-old-boy segment of the soft-drink-consuming public.

The question is, what message? As we have noted before, the "Joy of Cola"--a dubious proposition in the first place--says nothing about Pepsi to commend it over RC or Safeway Select, much less Coca-Cola. So challenge No. 1 is to incorporate the elements of the existing campaign to actually sell Pepsi, Diet Pepsi and Pepsi One. Based on what we have seen to date, there is no reason to believe BBDO Worldwide, New York, is up to the task.

The Pepsi Challenge would seem to be the perfect solution, but it may not be because of the difficulty of objective No. 2:

2) Coming out of the competition better liked, not as a flavor but as a brand. For whatever bizarre reasons, American consumers recoil at advertising that disses the competition. They think it's unkind and unfair. Thus, past Pepsi Challenges, like the burger wars, have called attention to the data without conferring any enduring advantage to the winner. So another challenge is to frame the issue in a way that doesn't result in a backlash of sympathy for the poor, beleaguered victim of the comparison.

And this gets to the final complication:

3) Taste preference is all well and good, but it has very little to do with brand preference. Nobody understands that better than Coca-Cola, which learned the hard way that consumer investment in its product extends beyond any objective measure of the subjective question of taste. In the New Coke debacle, the Coca-Cola Co. had mounds of data demonstrating flavor superiority for the sweeter new formulation. What they never asked consumers was whether they wanted a new Coke. The answer, of course, turned out to be "no." They wished--for reasons having to do with loyalty, familiarity, a sense of ownership and just plain inertia--to keep precisely the inferior Coke flavor the manufacturer was unilaterally taking away.

Pepsi should understand that, too, because although more people preferred the taste of Pepsi over Coca-Cola in 1975, and although more people preferred the taste of Pepsi to Coca-Cola in 1980, and the same in 1985, and in 1990, 1995 and, no doubt, 2000, more people continue to buy Coke. In nearly every market worldwide. Which means that to date Pepsi has again and again failed the true Pepsi Challenge--i.e., to alter consumer perceptions, to broaden the Pepsi audience, to generate Coke's level of emotion, to be not merely liked but loved by the people who feel the joy of cola.

The old Pepsi tricks of trotting out hot music acts, being witty and tweaking the competition may well result in some short-term market-share boost. What they will not do is address the fundamental problem: that Coke has a poignancy with consumers that does not match.